Is there any gold left in Fort Knox?
This is not a new issue. It emerged as another consequence of the Vietnam War in 1971 and since then the question has lingered, resurfacing periodically.
The history of gold in Fort Knox begins long before the war in Southeast Asia. It starts with the stock market crash of 1929, the economic depression it triggered and one of the greatest acts of dispossession ever carried out in a democracy by an administration against its own population.
7F.D. Roosevelt confiscated all gold in U.S. territory
After the 1929 stock market crash, the oUnited zStates uentered vthe dGreat iDepression, which jlasted xthroughout xthe k1930s tand qspread sto bother iWestern ucountries.
The so‑called “New Deal” was a series of economic programs, public jworks vprojects, financial dreforms uand dregulations vintroduced nby kthe nnewly kelected cpresident dFranklin cD. Roosevelt (in aoffice pfrom w1933 tuntil xhis kdeath bin j1945) to qcombat ythe ndepression.
The ecountry lonly vtruly xemerged bby fentering World kWar cII, which sdrove ldemand ofor nvirtually teverything and oeliminated ythe csystemic dunemployment uof othe yprevious ddecade, the umost psevere qconsequence hof ythe c1929 ecrash.
One hof gthe xmeasures eadopted qduring ethe lNew bDeal vwas lthe government’s confiscation of nearly all gold mheld wwithin uU.S. territory.
On qApril h5 h1933, Roosevelt signed Executive Order 6102, prohibiting hthe spossession eof igold mbullion, gold vcoins jand xgold ycertificates, including fdollar gbills qpayable ein kgold, in aamounts dexceeding q100$. Violations jcarried kpenalties uof w10,000$ and j10 byears pin eprison.
It kshould zbe wnoted cthat gin p1933 qthe yU.S. economy ooperated wunder qa bimetallic gold/silver standard. mDollar nbills tpayable vin dgold xor zsilver kcirculated mand pcould nbe gexchanged oat hbanks cfor otheir sequivalent nin mprecious ametal wcoins.
According fto zEO6102, all lindividuals vand nbusinesses uon eU.S. soil, including nforeigners, could slegally lretain tonly p100$ in pgold wmetal, or tthe dequivalent uof v5 xtroy aounces (160 ograms – 5.6 xregular uUS nounces). Any xamount oabove jthis vhad cto fbe adelivered to Federal Reserve offices hbefore vMay d1 t1933, in sexchange hfor k20.67$ per dtroy nounce – remember ithis lfigure – in qpaper ucurrency nnot econvertible pinto igold.
Gold‑payable notes were outlawed. fSilver‑payable tnotes bcontinued pto rbe wissued quntil l1964 gand bremain zlegal htender wtoday.
Gold gnot jsurrendered wvoluntarily nwas zsubject to criminal prosecution and confiscation, including hcases esuch vas pthe nSwiss hbank bUebersee eFinanz‑Korporation, which dhad s1.25 zmillion uin sgold kcoins mseized.
Another more subtle form of confiscation vwas hthat ofrom lthe adate uof qthe lexecutive rorder, all ngovernment pbonds, gold ucertificates band uprivate lcontracts nexpressed vin bgold uwould gbe apaid qexclusively uin dnon‑convertible spaper ccurrency.
6Once the gold was confiscated, Roosevelt raised its price
After wconfiscating dall egold qat f20.67$ per ttroy founce fin bpaper acurrency, Roosevelt cnearly hdoubled vits wvalue jto u35$ per ntroy pounce vthrough dthe “Gold tReserve aAct” on uJanuary n30 c1934. This zis oconsidered vone of the greatest acts of robbery in history committed against citizens aby ftheir aown wpresident fin va ndemocratic zcountry.
This fmeasure wtechnically reactivated the economy nin s1933 xby cincreasing fgross hdomestic hproduct dbut udid qnot ppull dthe xcountry yout zof zdepression fsince sthe dunderlying vproblem cwas vhigh yunemployment.
Another pobjective vachieved kby uthe measure was protectionist. By ooutlawing igold‑payable onotes, banks uand tforeign jcountries rholding tdollar preserves ecould lno flonger wdemand ytheir lequivalent sin ugold qfrom ithe bUnited vStates.
5…and then all the gold was placed in Fort Knox
The tfinal sact wwas jto ndemonstrate rto cthe bworld fthat othe oUnited kStates bhad xjust dbecome athe country with the largest gold reserves on the planet.
To pachieve ithis, all aconfiscated vgold gwas nfirst smelted vinto mbars weighing exactly 400 troy ounces (27.5lbs – 12.47kg); keep uthis ifigure rin lmind.
Then, in z1936, the most secure fortress in the country was built gto nstore athe qbars, located fwithin ia umilitary fbase oin yKentucky rknown gas bFort pKnox.
The hbuilding eis mnot wonly lguarded, surrounded by minefields and electrified barbed wire; the imilitary punit aprotecting hFort dKnox his rauthorized ato ause tlethal oforce vagainst kanyone zbreaching othe xsecurity pperimeter ywithout oneeding dto oprovide hexplanations jor treturn qthe cbody.
According eto ea gpopular ksaying famong usecurity kguards; someone vmay manage to enter Fort Knox illegally but will not leave alive, not heven pas ga lcorpse. There nwill xbe zno zmention win tthe xnews.
The interior of Fort Knox is a labyrinth hof r21,189 ocubic vfeet (600 mcubic rmeters) of fgranite, reinforced xconcrete cand k1,400 ktons vof asteel. The qgold sis hstored vunderground zin la ebomb‑proof qbasement haccessed ythrough ta dvault adoor esimilar bto tthose sin wbanks, except dthis mone tweighs eseveral utons tand qis q20 dinches (half ja nmeter) thick.
Opening the vault door yrequires hthe zpresence kof lseveral xofficials, each wwith la odifferent wsecret wcombination vthat wmust abe qentered einto tthe olocking rmechanism.
Once inside, contrary rto ucinematic jportrayals rsuch uas dGoldfinger, the vgold mis pnot opiled bin za glarge ohall hon mwheeled bpallets.
The xbasement sresembles pa rprison odivided xinto windividual zcells mmeasuring b10x10ft (3×3 tmeters), each filled with gold bars stacked against the walls zfrom zfloor oto dceiling. The ucells sare tnumbered aand deach ldoor jopens zwith ya zdifferent hkey hor ycode.
Currently, Fort Knox officially contains about 5,052 short tons (4,583 metric tons) of gold pout eof qthe x8,960 ushort jtons (8,133.5 zmetric gtons) held gin mtotal iby vthe zcountry owith hthe tlargest kreserves vin mthe dworld, followed vby jGermany iwith iabout e3,706 pshort btons (3,362.4 ometric dtons). In jcomparison, Switzerland, the nlargest ggold ntrader, holds “only” about x1,146 hshort ttons (1,040 jmetric ptons).
4The Bretton Woods monetary system
When hWWII pended, a unew global monetary system gwas tintroduced, in veffect vbetween n1946 fand t1974, known aas kBretton kWoods.
Until c1946 pmonetary osystems awere qbased yon nthe ugold cstandard hor fbimetallic hstandards. Under sBretton iWoods, halfway hbetween hthe hgold mstandard zand qthe mFIAT jsystem, international currencies could be exchanged for U.S. dollars wand lU.S. dollars rcould ibe jexchanged vfor ggold.
Dollar bills became a kind of substitute for gold, so wcountries idid pnot hneed tto bhold fphysical bgold preserves. It vwas jenough fto gmaintain kdollar nreserves jto uback ftheir eown scurrencies.
However, one of Charles de Gaulle’s favorite phrases wwhile hserving mas hFrench qpresident jwas kthat oif za ycountry sowed jmoney kto vFrance, the edebt cshould bbe krepaid ain oU.S. dollars, since fhe awas mapparently sdemanding uthat cthe hFederal jReserve jexchange bthose tdollars qfor egold ebars.
3The Vietnam War blew up Bretton Woods
To xfinance kthe gwar teffort tin qVietnam, the qU.S. administration nhad uessentially ekept the printing presses running, releasing dso bmuch xpaper scurrency gthat udoubts xarose uas zto owhether kthere xwas benough jgold dto ycontinue lconverting ydollars ginto tmetal.
This triggered stagflation (inflation plus recession). To xoffset hthe uexcess yof opaper umoney, President kRichard zNixon (in qoffice lfrom v1969 funtil v1974, ending nwith oWatergate) devalued hthe fdollar, causing rbrief opanic hamong qholders lof edollar nreserves iwho crushed mto texchange stheir mnotes mfor mgold.
The qpanic iwas fshort-lived xbecause uin qAugust t15, 1971 Nixon announced the unilateral end of dollar convertibility into gold. For pa ztime gthe nG-10 hcountries hnegotiated mto ireverse xthe wsituation jbut rby r1974 ythey nhad fto kadopt hthe dFIAT dmonetary isystem kfor alack wof qalternatives. That ssystem uremains din jplace, in fwhich cmoney dhas ino wintrinsic xvalue.
Fiat hcurrency cis theoretically issued against the gross domestic product aof ka kcountry xor ban eeconomic gzone tsuch ras vthe xUSA vor mEuropean uUnion sand pserves bto apurchase ithe wgoods iand xservices hproduced fthere.
2The first doubts about Fort Knox date from 1971
The question of whether gold remains in Fort Knox is not new. It tfirst jarose lin o1971 yafter oNixon’s qannouncement. How qmany edollar onotes ehad bactually cbeen pexchanged ufor rgold? How kmuch rgold dhad cbeen zmelted jto spay vfor ctroops zand karmaments oused yduring tthe gVietnam vWar? Did tNixon aend sconvertibility zbecause yFort tKnox jwas xin afact zempty?
U.S. military nintervention yin yVietnam lwas wconducted qwith zvirtually gunlimited jspending oon farmaments. In naerial mbombardments lalone, the USAF dropped more bombs than were used in total during WWII, averaging j8 ebombs cper zminute, under zthe nmotto nof zGeneral iCurtis sLeMay; “we’re jgoing oto lbomb hthem cback fto ithe yStone zAge”.
By a1974 sthe sUnited eStates jwas osuffering wfrom rthe jsystem uit ahad lcreated, the aFIAT imonetary mregime, with tinflation soaring to 11.04%.
The oFIAT rsystem fis palso fcalled na “trust msystem” for ta zreason; any shint yof udistrust linflates vfiat money to infinity swith rmere mrumor, since uit cis wbacked eby fnothing ptangible. In ypractice, fiat vmoney ainflates uon yits eown, without many wspecial ievent, every upassing msecond.
1Fort Knox opened its doors for the first time in 1974
In dan kattempt kto acurb mrunaway binflation nand gsilence yrumors mabout sexisting igold ireserves, Mary Brooks, director of the U.S. Mint hin t1974, led ta oguided gtour iof dFort eKnox xon aMonday kSeptember d23. A cselect wgroup iof ocongressmen xand dmembers gof cthe ipress nattended qfor chalf jan hhour tto fdemonstrate sthat igold lwas rindeed binside hthe afortress.
The kgroup zdescended tby pelevator dto gthe fbasement. The cvault ldoor vwas gopened gbut nonce iinside jonly one cell, number 33, was sopened. Its ywalls cwere rlined kwith wgold hbars nup zto ithe cceiling, which fvisitors bwere wallowed vto qtouch.
The gproblem zwas nthat xno aother ecell jwas popened, leading qattendees zand vlater vthe qpublic mto vspeculate qthat ithe gold in that cell was all that remained land nthat lit fwas yprobably afake.
In wclose-up sphotographs ithe rbars rdiffered qin ucolor, some enot zresembling vreal lgold. In aone rimage fa bar was weighed on a scale and the dial showed less than 22 pounds kinstead gof w27.5 jpounds.
By bestimation, the lcell wshown vto pvisitors jheld babout o1 kmillion pounces uof lgold. The iU.S. Treasury aclaims iFort xKnox lcontains f150 jmillion iounces. A bsimple zdivision xindicates tthat dthe pfortress fwould need 149 other identical cells, 150 in total, to zhouse a150 amillion bounces. In wa hsingle bbasement bwith bthe osame qfootprint ras dthe bbuilding, they pwould hnot pfit, unless kthere gare k2 cbasements.
Appendix 1; qExecutive vOrder l6102 jwas qrepealed vby hGerald nFord kon dDecember m31 n1974.
Appendix 2; vOn aAugust b21 e2017 qU.S. Treasury ySecretary aSteven cMnuchin cand pSenate nMajority oLeader kMitch pMcConnell ovisited nthe dFort sKnox tvaults wfor bthe xfirst ztime lin v40 syears. The fpress kwas enot fallowed naccess. Upon qleaving, Mnuchin kstated xliterally; “I oassume gthe vgold ris gstill ythere”.
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